| Call Provision | A provision in the mortgage that gives the mortgagee the right to call the mortgage due and payable at the end of a specified period for whatever reason. |
| Capital | Accumulated wealth. A portion of wealth which is set aside for the production of additional wealth; specifically, the funds belonging to the partners or shareholders of a business, invested with the expressed intention of their remaining permanently in the business. |
| Capital Expenditure | The cost of an improvement made to extend the useful life of a property or to add to its value. |
| Capital Gain | Taxable profit on the sale of an appreciated asset. |
| Capital Improvement | Any structure or component erected as a permanent improvement to real property that adds to its value and useful life. |
| Caps | Caps are used on adjustable rate mortgages (ARM's) to limit the interest rate and/or the payment. Most ARMs have a periodic cap that is around 2% per year and a life cap of around 5%-6% over the life of the loan. Payment only caps sometimes create negative amortization where the principal balance of the loan increases rather than decreases over time. |
| Cash Out | A loan transaction in which the borrower receives funds at the time of closing. |
| Cash Out Refinance | A refinance transaction in which the amount of money received from the new loan exceeds the total of the money needed to repay the existing first mortgage, closing costs, points, and the amount required to satisfy any outstanding subordinate mortgage liens. |
| Caveat Emptor | A legal term meaning let buyer beware. |
| Certificate of Deposit | A document written by a bank or other financial institution that is evidence of a deposit, with the issuer¦s promise to return the deposit plus earnings at a specified interest rate within a specified time period. |
| Certificate of Eligibility | A certificate obtained by a veteran from a Veteran's Administration office which states that the veteran is eligible for a VA insured loan. |
| Certificate of Occupancy | Document issued by a local governmental agency that states a property meets the local building standards for occupancy. |
| Certificate of Reasonable Value (CRV) | An appraisal of property for the purpose of insurance by the Veteran's Administration. |
| Certificate of Title | A certification issued by a title company or a written opinion rendered by an attorney that the seller has good marketable and insurable title to the property which he is offering for sale. A certificate of title offers no protection against any hidden defects in the title which an examination of the public records could not reveal. The issuer of a certificate of title is liable only for damages due to negligence. The protection offered a homeowner under a certificate of title is not as great as that offered in a title insurance policy. |
| Certified Copy | A true copy, attested to be true by the officer holding the original. |
| Cestui Que Trust | One having an equitable interest in property with the legal title being vested to the trustee. |
| Chain of Title | The history of all of the documents that transfer title to a parcel of real property, starting with the earliest existing document and ending with the most recent. |
| Change frequency | The frequency (in months) of payment and/or interest rate changes in an adjustable-rate mortgage (ARM). |
| Chattel | Personal property. |
| Claim | An amount requested of an insurer, by a policyholder or a claimant, for an insured loss. |
| Clear Title | A title that is free of liens or legal questions as to ownership of the property |
| Client | Person who employs the agent. Typically the seller is a client. The buyer can be a client (buyer's broker) or customer (seller's broker). |
| Closing | Conclusion of a real estate sale where the title of the property is transferred to the new owners and funds are transferred to the appropriate parties ( seller, old lender, real estate broker, etc.). |
| Closing Agent | A neutral third party that facilities the closing of a real estate transaction. The closing agent can be an escrow company, title company or attorney. |
| Closing Cost Item | A fee or amount that a homebuyer must pay at closing for a single service, tax, or product. |
| Closing Costs | Expenses incurred by the buyer/borrower and the seller in a real estate or mortgage transaction. There can be non-recurring costs that include a one time charge for points, appraisal fees, etc. or a prorating of recurring costs such as taxes and insurance incurred while the new buyer/borrower owns the real estate.ß Also called settlement costs. |
| Closing Day | The day on which the formalities of a real estate sale are concluded. The buyer signs the mortgage, and closing costs are paid. The final closing merely confirms the original agreement reached in the agreement of sale.. |
| Closing Statement | Statement prepared for the buyer and seller itemizing all of the costs of a real estate transaction. |
| Cloud on Title | An outstanding claim or encumbrance which, if valid, adversely affects the marketability of title. |
| Co-maker | A person who signs a promissory note along with the borrower. A co-maker's signature guarantees that the loan will be repaid, because the borrower and the co-maker are equally responsible for the repayment. |
| Co-Maker or Co Borrower | Equally responsible for repayment as the borrower. An additional borrower on a loan. A co-borrower's obligation on a loan are the same as all other borrowers. |
| Code of Ethics | Standards subscribed to by members of the National Association of Realtors. |
| Coinsurance | A sharing of insurance risk between the insurer and the insured. Coinsurance depends on the relationship between the amount of the policy and a specified percentage of the actual value of the property insured at the time of the loss. |
| Coinsurance Clause | A provision in a hazard insurance policy that states the amount of coverage that must be maintained - as a percentage of the total value of the property - for the insured to collect the full amount of a loss. |
| Collateral | An asset (such as a car or a home) that guarantees the repayment of a loan. The borrower risks losing the asset if the loan is not repaid according to the terms of the loan contract. |
| Collection | The efforts used to bring a delinquent mortgage current and to file the necessary notices to proceed with foreclosure when necessary. |
| Commercial Property | Property intended for use by all types of retail and wholesale stores, office buildings, hotels and service establishments. |
| Commission | Fee paid to a broker or other entity for services rendered. Real estate brokers and mortgage brokers receive a commission for the services they provide; a real estate broker secures a buyer for a property that is for sale and a mortgage broker secures a mortgage loan for the buyer to finance the purchase of a property. Commissions are generally paid as a percentage of the sales price in a real estate transaction or the loan amount in a mortgage transaction. |
| Commitment | A written promise to make or insure a loan for a specified amount and on specified items. |
| Commitment | A written letter of agreement detailing the terms and conditions by which the lender will lend and the borrower will borrow funds to finance a home. |
| Commitment Letter | A formal offer by a lender stating the terms under which it agrees to loan money to a homebuyer. |
| Common Area assessments | Levies against individual unit owners in a condominium or planned unit development (PUD) project for additional capital to defray homeowners' association costs and expenses and to repair, replace, maintain, improve, or operate the common areas of the project. |
| Common Areas | Those portions of a building, land, and amenities owned (or managed) by a planned unit development (PUD) or condominium project's homeowners' association (or a cooperative project's cooperative corporation) that are used by all of the unit owners, who share in the common expenses of their operation and maintenance. Common areas include swimming pools, tennis courts, and other recreational facilities, as well as common corridors of buildings, parking areas, means of ingress and egress, etc. |
| Common Law | Rules based on usage as demonstrated by decrees and judgments from the courts. |
| Community Property | Property owned jointly by husband and wife. In some western and southwestern states, a form of ownership under which property acquired during a marriage is presumed to be owned jointly unless acquired as separate property of either spouse. |
| Comparables | A abbreviation for comparable properties used for comparative purposes in the appraisal process; facilities of reasonably the same size and location with similar amenities; properties which have been recently sold, which have characteristics similar to property under consideration, thereby indicating the approximate fair market value of the subject property. |
| Compound Interest | Interest paid on the original principal balance and on the accrued and unpaid interest. |
| Condemnation | The taking of private property for public use by a government unit, against the will of the owner, but with payment of just compensation under the government's power of eminent domain. Condemnation may also be a determination by a governmental agency that a particular building is unsafe or unfit for use. |
| Conditional Commitment | A lenders promise to issue a loan subject to certain conditions. Generally, the lender will not fund the loan until the conditions have been met. |
| Conditional Offer | Purchase offer in which the buyer proposes to purchase property only after certain events (sale of another home, finding a loan commitment, etc.) occur. |
| Condominium | Individual ownership of a dwelling unit and an individual interest in the common areas and facilities, which serve the multi-unit project. |
| Condominium Conversion | Changing the ownership of an existing building (usually a rental project) to the condominium form of ownership. |
| Condominium Hotel | A condominium project that has rental or registration desks, short-term occupancy, food and telephone services, and daily cleaning services and that is operated as a commercial hotel even though the units are individually owned. |
| Consideration | Anything of value given to induce another to enter into a contract. Earnest money deposit on a sales contract is consideration. |
| Construction Loan | Short-term financing for real estate construction. Generally followed by long term financing called a take out loan issued upon completion of construction. |
| Consumer Reporting Agency (or bureau) | An organization that prepares reports that are used by lenders to determine a potential borrower's credit history. The agency obtains data for these reports from a credit repository as well as from other sources. |
| Contingency | Condition which must be satisfied before the buyer can consummate the purchase of a property. Contingencies are generally outlined in the purchase contract between the buyer and seller. |
| Contract | An oral or written agreement to do or not to do a certain thing. |
| Contract of Purchase | An agreement between parties for the sale of real estate. In some states it is synonymous with a Purchase Agreement, Sales Agreement, or Land Contract. In Texas it is known as an Earnest Money Contract. |
| Contract of Sale | A purchase transaction in which the buyer receives possession of the property, but the seller retains title. |
| Contract Sales Price | The full purchase price as stated in the contract. |
| Conventional Loan | A mortgage loan that is not guaranteed or insured by the government. FHA and VA loans are not conventional loans. |
| Conventional Mortgage | Any mortgage that is not insured or guaranteed by the federal government. |
| Convertibility clause | A provision in some adjustable-rate mortgages (ARMs) that allows the borrower to change the ARM to a fixed-rate mortgage at specified time. |
| Convertible ARMs | ARMs that have a provision allowing the borrower to convert the mortgage to a fixed rate term. The conversion feature is outlined in the mortgage note and has certain restrictions. |
| Cooperative (Co-op) | A type of multiple ownership in which the residents of a multiunit housing complex own shares in the cooperative corporation that owns the property, giving each resident the right to occupy a specific apartment or unit. |
| Cooperative Housing | An apartment building or a group of dwellings owned by a corporation, the stockholders of which are the residents of the dwellings. It is operated for their benefit by their elected board of directors. In a cooperative, the corporation or association owns title to the real estate. A resident purchases stock in the corporation, which entitles him to occupy a unit in the building or property owned by the cooperative. While the resident does not own his unit, he has an absolute right to occupy his unit for as long as he owns the stock. |
| Cooperative Mortgages | Mortgages related to a cooperative project. |
| Cooperative Project | A residential or mixed-use building wherein a corporation or trust holds title to the property and sells shares of stock representing the value of a single apartment unit to individuals who, in turn, receive a proprietary lease as evidence of title. |
| Cost Basis | Accounting figure that includes original cost of property plus certain expenses to purchase, money spent on permanent improvements and other costs, minus any depreciation claimed on tax returns over the years. |
| Cost of Fund Index (COFI) | An index that is used to determine interest rate changes for certain adjustable-rate mortgage (ARM) plans. It represents the weighted-average cost of savings, borrowings, and advances of the 11th District members of the Federal Home Loan Bank of San Francisco. |
| Cost Plus Contract | A building contract setting the builder's profit at a set percentage of actual cost of labor and materials. |
| Counteroffer | A new offer made as a result of another offer, which cancels the original offer |
| County | A division within a state, usually encompassing one or more cities or towns. |
| Covenant | An agreement written into deeds and other instruments promising performance or nonperformance of certain acts or stipulating certain uses or non users of the property. |
| Coverage | The amount of protection, usually expressed in a percentage of the total claim amount, an insured receives under a certificate. |
| Credit History | A record of an individual's open and fully repaid debts. A credit history helps a lender to determine whether a potential borrower has a history of repaying debts in a timely manner. |
| Credit Line Insurance | A type of insurance often bought by mortgagors because it will pay off the mortgage debt if the mortgagor dies while the policy is in force. |
| Credit Report | A report of an individual's credit history prepared by a credit bureau and used by a lender in determining a loan applicant's creditworthiness. |
| Credit Repository | An organization that gathers, records, updates, and stores financial and public records information about the payment records of individuals who are being considered for credit. |
| Creditor | A person to whom money is owed. |
| Cure | A loan that is removed from a delinquency status with no loss to the insurer. |
| Customer | Typically, the buyer (before buyer agency laws), as opposed to the principal (seller). |
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